XRP may be undervalued, says Ripple CTO; here’s the debate

As XRP hovers around $1.50, Ripple’s CTO Emeritus David Schwartz has weighed into a growing community debate: is the token undervalued given recent ETF approvals, institutional adoption, and on-chain accumulation? Here’s what the market efficiency argument actually reveals about XRP’s price discovery.

The conversation comes amid rising community concern that XRP’s price does not reflect its growing role in payments, regulatory progress, institutional adoption, and inflows into XRP ETFs.

Despite these developments, XRP continues to trade near $1.5, prompting debate over the accuracy of XRP price prediction models.

“Over time, markets tend to act in a rational way,” — David Schwartz, CTO Emeritus, Ripple. “Experienced and well-funded participants can correct pricing issues as they appear, ensuring that long-term movements remain reasonable.”

Community concerns highlight potential undervaluation

A pseudonymous XRP investor, Mr. Nobody, raised questions about XRP price prediction with Schwartz, noting that supply factors and on-chain accumulation trends seem at odds with the token’s stagnant spot price.

He suggested that ongoing institutional inflows and ETF demand could indicate higher intrinsic value than the market currently reflects.

“Price discovery does not always happen smoothly,” — Mr. Nobody, XRP investor. “Fragmented liquidity and derivative market activity may delay how XRP price prediction materializes publicly, even when fundamentals support a higher valuation.”

This sentiment underscores a wider debate in the XRP community: whether market prices accurately incorporate all available information or if inefficiencies persist due to fragmented trading venues, derivatives influence, and delayed institutional activity.

Schwartz on market rationality and short-term gaps

In response, Schwartz emphasized that short-term disparities between expected and actual prices are normal in crypto markets.

He highlighted that liquid markets with knowledgeable participants allow traders to act quickly on mispricing, gradually aligning spot prices with underlying fundamentals.

Schwartz described a scenario with two opposing forces: a bullish factor supporting higher XRP valuations (factor X) and a bearish factor restraining growth (factor Y).

He noted that effective XRP price prediction depends on factor Y weakening while factor X remains strong. In such cases, rational trading behavior would gradually push prices toward a balanced level.

“If a price is clearly wrong due to manipulation or a hidden factor, others reach the same conclusion and trade accordingly,” — David Schwartz, CTO Emeritus, Ripple. “This naturally adjusts the XRP price prediction over time.”

Institutional influence and derivative markets

The discussion also acknowledged that XRP price prediction can differ between public exchanges and private OTC markets.

Mr. Nobody observed that institutional accumulation often occurs off-exchange, with derivatives creating “paper supply” that can dampen visible spot price movement.

Schwartz agreed that these factors could produce short-term gaps but stressed that such discrepancies are typically temporary.

Traders moving between private and public markets help reconcile differences, gradually reflecting accurate valuations in spot prices.

This insight suggests that while XRP’s market price hovers around $1.5, the token is not necessarily mispriced.

Instead, temporary inefficiencies and structural market factors may obscure immediate price reflection, but the broader market mechanisms ultimately work toward correcting them.

XRP price prediction outlook

Ultimately, XRP price prediction remains influenced by multiple factors: institutional adoption, ETF inflows, payment utility, regulatory clarity, and market liquidity.

Short-term deviations from perceived fair value may occur, but Schwartz’s analysis indicates that market forces and arbitrage opportunities will eventually reconcile discrepancies.

“Even if short-term differences appear, the system will adjust and reflect a more balanced price,” — David Schwartz, CTO Emeritus, Ripple.

For investors, this implies that XRP price prediction should consider both on-chain fundamentals and the dynamic interplay of public and private market activity, emphasizing a medium-to-long-term perspective rather than relying solely on immediate spot prices.

In conclusion, XRP price prediction remains a nuanced assessment, with community expectations, institutional participation, and market structure all playing critical roles in how valuations evolve.

While the $1.5 level may persist temporarily, the mechanisms for correction are active, supporting rational price alignment over time.